Twenty-two years after the Legislature and then-Gov. Pete Wilson made a horrendous error in reconfiguring California’s electric power system, lawmakers are weighing another big change, this time integrating California’s grid with those of other Western states. Politicians should be very cautious of the new scheme.
There aren’t too many folks in and around the state Capitol who were there 22 years ago, when the building’s denizens committed one of California history’s most horrendous errors.
The Legislature unanimously passed—and then-Gov. Pete Wilson signed—a misnamed, misbegotten “deregulation” of the state’s electric power system.
Utility executives, political leaders and even consumer groups all promoted the plan, promising that it would be a win-win for everyone.
But some of it was pure political hokum—such as giving power customers a much-ballyhooed rate cut that actually was financed with a bond issue those same consumers would repay, with interest, through their bills.
Most importantly, it turned out to be a monumental failure.
It opened the door to market manipulation by Enron and some other big energy players, drove one major utility (Pacific Gas and Electric) into bankruptcy, almost sent another (Southern California Edison) into insolvency, caused blackouts and wound up costing California consumers many billions of dollars.
This brief excursion into not-so-distant history is important because the current crop of Capitol politicians, including Gov. Jerry Brown, is pushing another big reconfiguration of California’s electric power system.
Newly drafted legislation would integrate California’s grid with those of other Western states and perhaps cede operational authority from a politically accountable agency, the California Independent System Operator (CAISO) to a new regional agency dominated by the power industry.
CAISO was created after the deregulation debacle to provide more accountability, but it’s the only regional operator organized that way. All others in the country are industry-dominated, as federal law prefers.
Assembly Bill 813, which passed the Assembly more than a year ago, has been stripped of its previous content behind closed doors and now contains the new scheme.
The plan seems to have broad support from both the traditional power suppliers and so-called “green-power” generators.
Backers have formed two front groups to push for its passage, arguing that integration would give California an outlet for its excess solar and wind power.
“Evolving California’s grid operator from a single state to a western region will lower rates, create jobs, and will allow for a cleaner grid by increasing the amount of wind and solar we can responsibly manage,” Sarah Webster, vice president of San Francisco-based Pattern Energy, said in a statement on behalf of one group.
It’s also touted as making it easier for California to wean itself from carbon-based power, because the state could draw on juice from other states to back up relatively unreliable green sources. That, apparently, is why Brown, a fervent advocate for reducing greenhouse gases, is a strong backer.
So what’s wrong with all of that?
Critics, including some environmental groups, contend that power coming into California from other states could be generated, directly or indirectly, in ways that California itself is shunning, such as big dams, nuclear and even coal.
California, they say, could be compelled to use that power if CAISO, whose board members are appointed by the governor, is made subservient to a regional agency dominated by big utilities and generators.
Billionaire Warren Buffet, whose Berkshire Hathaway conglomerate owns Pacificorp, a huge power supplier in the Pacific Northwest, would be a major player.
Californians were sold a bill of shoddy goods 22 years ago and are still paying the price in higher electricity bills.
This is a very complex issue that isn’t sexy clickbait for the media, but they should be paying more attention. And politicians had better think very carefully before they vote for another power play just because it looks good on paper.